U.S. Establishes Regulations That Could Ban Chinese Vehicles, Including Polestar.

The Biden administration has approved new regulations that would effectively ban the entry of Chinese vehicles into the United States, arguing that it is necessary to prevent the "sale or import" of connected vehicle software from "countries of concern." This measure could significantly impact major automakers like Ford and GM, as well as smaller producers like Polestar and companies that, despite not manufacturing cars, like Waymo.

The regulations cover everything related to vehicle connectivity, including Bluetooth, Wi-Fi, cellular, and satellite components. Additionally, they address concerns that technologies such as cameras, sensors, and onboard computers could be used by foreign adversaries to gather sensitive information about U.S. citizens and infrastructure. Furthermore, China would be prohibited from testing its autonomous vehicles on U.S. soil.

Gina Raimondo, the U.S. Secretary of Commerce, emphasized that "today's cars have cameras, microphones, GPS, and other internet-connected technologies." She added that "it doesn't take much imagination to understand how a foreign adversary with access to this information could pose a serious risk to our national security and the privacy of citizens in the U.S."

The regulation concerning prohibited software will be implemented for 2027 model vehicles, while the ban on hardware from China will apply to 2030 models. Recently, the original rules were updated to exclude vehicles weighing over 10,000 pounds, which will allow companies like BYD to continue assembling electric buses in California. This new regulation represents the latest intensification of trade restrictions on vehicles manufactured in China, in a context where this country is producing more cars than ever, solidifying its position as the world's leading automobile exporter.

The regulation also covers vehicles and components manufactured by Russia. The White House has stated that China's access to vehicle software poses "a significant threat" to the United States by granting an adversary "unrestricted access" to critical technological systems and the user data they collect. The administration emphasizes that with this final rule, President Biden is fulfilling his commitment to secure critical supply chains in the U.S. and protect national security.

The automotive sector tried to delay the implementation of the regulation by a year, hoping the new Trump administration would enforce it, but did not succeed. The Alliance for Automotive Innovation, which includes GM, Ford, Volkswagen, Toyota, among others, expressed support for the objectives of the proposed regulation last year but also warned that "the global automotive supply chain is one of the largest and most complex in the world" and that parts cannot simply be switched out without causing disruptions. More explicit criticism came from other manufacturers, such as Polestar, which stated that the new rule "would effectively prohibit Polestar from selling its cars in the United States, including those manufactured in South Carolina."

The White House clarifies in its information that this regulation prevents the import or sale of connected vehicles "by entities that are owned by, controlled by, or subject to the jurisdiction or direction of the People's Republic of China or Russia, even if those vehicles were manufactured in the United States." For its part, Waymo, which plans to use vehicles manufactured by Geely’s Zeekr for its future robotaxi fleet, indicated that it takes precautions to ensure that the acquired vehicles do not have telematics systems installed by the manufacturer. However, this regulation could significantly disrupt Alphabet's expansion plans if the government decides to ban the import of the Zeekr vehicle under this new rule. Waymo has stated that it is reviewing the final regulation and appreciates the swift drafting of it, although a spokesperson for Polestar did not immediately respond to requests for comments.